High Rock Westminster Street, LLC v. Bank of America, N.A.

Before
the Court are Bank of America, N.A.'s (“BOA”
or the “Bank”) Motion for Summary Judgment
(“Motion for Summary Judgment” or
“BOA's Motion”) (ECF No. 205) and High Rock
Westminster Street LLC's (“High Rock”) Motion
to Amend the Complaint (“Motion to Amend” or
“High Rock's Motion”) (ECF No. 257). For the
reasons set forth below, BOA's Motion is GRANTED IN PART
and DENIED IN PART; High Rock's Motion is DENIED.

I.
Background

This
dispute centers on BOA's obligations under a ten-year,
so-called “triple net” lease (the
“Lease”) between BOA and High Rock[1] for the building
at 111 Westminster Street in Providence, Rhode Island (the
“Building” or
“Premises”).[2] The interaction between the Lease's
Repair and Termination Provisions form the core of the
parties' dispute. Under the Lease's Repair Provision,
BOA agreed to

keep the Premises in good condition and repair and be
responsible for all maintenance, repairs and replacements to
the Premises, structural and nonstructural, ordinary or
extraordinary, foreseen or unforeseen, including, but not
limited to, all structural repairs and replacements to the
foundation, exterior and/or load bearing walls, interior and
exterior windows, roof, and mechanical, heating, ventilation
and air conditioning systems of the Premises . . . .

make all such repairs and replacements as may be necessary to
keep and maintain the Premises in a condition consistent with
other Class B high rise office buildings of similar age and
construction located in the greater Providence, Rhode Island
metropolitan area, and shall not defer any repairs,
maintenance or replacements in anticipation of the expiration
of the term.

(Id.) BOA also agreed that

[n]otwithstanding the foregoing, (a) [BOA], at its sole cost,
shall replace the existing main electrical switch gear
(“Switch Gear”) in the basement of the building
located at the Premises, provided that if at the end of the
term [BOA] has not replaced the Switch Gear and has not
exercised its right pursuant to Section 2.2 to extend the
term of the this Lease, then [BOA] shall pay the sum of $120,
000.00 to [High Rock] . . . .

(Id.) And the Repair Provision concludes by
requiring BOA to

keep the heating, ventilating and air conditioning, plumbing,
electrical and other mechanical systems in good operating
condition . . . [, ] make any repairs, replacements or
improvements which may be required by any laws, rules,
regulations, ordinances or orders of any federal, state,
local, or other governmental authority . . . [, ] [and] use
all reasonable precaution to prevent deterioration, waste,
damage or injury to the Premises.

(Id.) In a separate provision, BOA also agreed to
indemnify High Rock for costs, damages, and expenses of
certain types of asbestos in the Building. (See Id.
§ 27.)

As
detailed below, the parties hotly dispute how these
maintenance and repair requirements interact with the
Lease's Termination Provision. There, BOA agreed to

surrender the Premises to [High Rock] in as good condition
and repair as when the Lease commenced, excepting ordinary
wear and tear, condemnation, damage from any cause not
required to be repaired or replaced by [BOA] . . . .

(Id. § 18.) BOA also agreed that

[a]ll movable furnishings, trade fixtures and other equipment
and personal property owned by [BOA] may be removed from the
Premises by [BOA], at [BOA]'s sole expense, no later than
the date of termination . . . .

(Id.)

In
2013, BOA decided not to renew the Lease and vacated the
Building. Shortly thereafter, High Rock commenced the present
suit. According to High Rock, BOA (1) failed to meet its
maintenance and repair obligations for a number of the
Building's components including its façade,
electrical distribution system, and heating and cooling
systems (“HVAC” systems) (Counts I and II); (2)
breached the Lease's implied covenant of good faith and
fair dealing and committed waste when it failed to properly
maintain the Building (Counts III and IV); (3) left so much
furniture in the Building that BOA was effectively a holdover
tenant liable for rental payments (Count V); and (4) that as
a result of BOA's maintenance failures, BOA has caused
High Rock to lose rental income for the Building (Count
VI).[3]
(See Compl., ECF No. 1.) High Rock also moves to amend its
Complaint to add allegations that BOA failed to remove
asbestos as required under the Lease. (See Pl.'s Mot. to
Am., ECF No. 257.)

BOA now
seeks summary judgment on five of High Rock's six claims
and opposes High Rock's Motion to Amend.[4] BOA first argues
that it satisfied the Lease's maintenance and repair
provisions because it returned the Building in the same
condition as when it started the Lease in 2003. BOA then
argues that High Rock's remaining claims fail as a matter
of law and, that in any event, High Rock's damages are
too speculative to afford it any relief. BOA also opposes
High Rock's Motion, arguing that High Rock has not
presented any justification for its long delay in attempting
to add the asbestos claim.

II.
Legal Standards

Summary
judgment is appropriate “if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). An issue of fact is only considered
“‘genuine' if it ‘may reasonably be
resolved in favor of either party.'” Cadle Co.
v. Hayes, 116 F.3d 957, 960 (1st Cir. 1997) (quoting
Maldonado-Denis v. Castillo-Rodriguez,23 F.3d 576,
581 (1st Cir. 1994)). When deciding a motion for summary
judgment, the court must “examine[] the entire record
‘in the light most flattering to the nonmovant and
indulg[e] all reasonable inferences in that party's
favor.'” Id. at 959 (quoting
Maldonado-Denis, 23 F.3d at 581).

Under
Federal Rule of Civil Procedure 15(a), a party may amend its
complaint once as a matter of course within 21 days of
serving it or 21 days after the service of a responsive
pleading. When this one-time right to amend is exhausted,
“a party may amend its pleading only with the opposing
party's written consent or the court's leave.”
Fed.R.Civ.P. 15(a)(2). And, while under Rule 15, courts
should “freely give leave” to amend “when
justice so requires, ” this dictate is not without
limits. Id. Even under Rule 15's
“amendment-friendly regime, ” U.S. ex rel.
D'Agostino v. EV3, Inc., 802 F.3d 188, 192 (1st Cir.
2015), courts can “deny leave to amend when the request
is characterized by ‘undue delay, bad faith, futility,
[or] the absence of due diligence on the movant's
part.'” Nikitine v. Wilmington Trust Co.,
715 F.3d 388, 390 (1st Cir. 2013) (quoting Palmer v.
Champion Mortg.,465 F.3d 24, 30 (1st Cir. 2006)).
Indeed, this Court's Local Rules specify that
“[a]ny motion to amend a pleading shall be made
promptly after the party seeking to amend first learns the
facts that form the basis for the proposed amendment.”
D.R.I. LR Cv 15 (emphasis added).

III.
Discussion

A. High
Rock's Breach of Contract Claims The parties largely
agree on the principles of contract interpretation the Court
should employ to determine BOA's maintenance and repair
obligations under the Lease. Generally, “[i]f a
contract is clear and unambiguous, the meaning of its terms
presents a question of law for the court.” Rotelli
v. Catanzaro,686 A.2d 91, 94 (R.I. 1996) (citing
Hodor v. United Servs. Auto. Ass'n, 637 A.2d
357, 359 (R.I. 1994)). And “whether the terms of a
contract are clear and unambiguous is itself a question of
law, and the court may consider all the evidence properly
before it in reaching its conclusion.” Id.
(citing Westinghouse Broad. Co. v. Dial Media, Inc.,410 A.2d 986, 991 (R.I. 1980)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
determine if a contract is unambiguous, the court must review
the document &ldquo;in its entirety and [give] its language .
. . its plain, ordinary and usual meaning.&rdquo; Paradis
v. Greater Providence Deposit Corp.,651 A.2d 738, 741
(R.I. 1994). This means that the court must give every word
of the contract &ldquo;meaning and effect; an interpretation
that reduces certain words to the status of surplusage should
be rejected.&rdquo; IDC Prop., Inc. v. Chicago Title Ins.
Co., 974 F.Supp.2d 87, 99 (D.R.I. 2013) (quoting
Andrukiewicz v. Andrukiewicz,860 A.2d 235, 239
(R.I. 2004)). But where a contract sets forth both general
and specific provisions, the more specific provisions
control. See Sch. Comm. of Town of N. Kingstown v.
Crouch, 808 A.2d 1074, 1079 (R.I. 2002) (applying the
rule that specific terms in a contract limit general terms);
Elliot Leases Cars, Inc. v. Quigley,373 A.2d 810,
813 (R.I. 1977) (same); see ...

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